Sustainability in the value chain

A combination of innovative capability and proximity to customers is a key success factor for Evonik and drives profitable growth. In our growth divisions - Specialty Additives, Nutrition & Care, and Smart Materials - we identify future-oriented innovation growth fields, which we use to achieve our ambitious targets.

STRATEGY AND MANAGEMENT

Innovations play a key role in aligning Evonik systematically with sustainability and profitable growth. In this way, we are also helping our customers to achieve their own climate protection, circularity, and biodiversity objectives. Examples of our innovative contribution to a sustainable transformation are our membrane technologies and our lipid nanoparticles for modern mRNA vaccines.

Sustainability is integrated into the management of our innovation portfolio. The aim is to improve both our handprint and our footprint. Therefore, there are deliberate personnel overlaps between the research, development & innovation (RD&I) council and the sustainability council. We use strategic perspectives to allocate our research and development resources. These include an intensive sustainability assessment using the methodology that has become established for the sustainability analysis of our business. Idea to Profit (I2P^®) is used to manage our R&D projects—from the idea through systematic development to profitable commercialization. In 2022, we included our Sustainability Focus Areas in this process for the first time.

Our innovative capability enables us to open up opportunities in new, future-oriented businesses in six innovation growth fields:

• Sustainable Nutrition

    Establishing new products and services for sustainable nutrition of livestock and people

• Healthcare Solutions

    Developing new materials for implants, as components of cell culture media, and for custom-tailored, innovative drug formulations

• Advanced Food Ingredients

    Creating a portfolio of health-enhancing substances and nutritional supplements as a contribution to healthy nutrition

• Membranes

    Extending SEPURAN® technology for efficient gas separation to further applications

• Cosmetic Solutions

    Developing further products based on natural sources for cosmetics and sensorially optimized formulations for skincare products

• Additive Manufacturing

    Developing products and technolo­gies for additive manufacturing

INNOVATION

Our aim is to generate additional sales of over €1 billion with these innovation growth fields by 2025. We are making good progress towards this.

Creavis serves the Evonik Group as an innovation driver for resource-saving solutions with a perspective that goes beyond 2025. In this role, it develops transformative innovations beyond the product and market focus of the operational units. Creavis bundles its activities in three incubation clusters:

• The Defossilation cluster helps industries become less dependent on fossil raw materials by developing high-growth solutions that make a contribution to the transition to a circular, climate-neutral economy.

• The Life Sciences cluster focuses on novel concepts for resource-saving and sustainable food production for the world’s continuously growing population. Another focal area is preventing and curing diseases, especially as many people are living to an advanced age.

• Solutions Beyond Chemistry fosters traceable, secure, and circular value chains based on domain knowledge and data-based solutions. These increase the transparency, effectiveness, and sustainability of industrial systems.

One of the most important requirements placed on the chemical industry by its stakeholders is that all substances and products are produced, handled and used not only in conformity with the law but also under safe conditions. 

Product stewardship at Evonik includes compliance with all legal regulations, such as the European chemicals regulation REACH or the Globally Harmonized System (GHS) for the classification and labeling of chemicals. In addition to the legal regulations, we have been committed to the voluntary international Responsible Care® Initiative and the Global Charter of the International Chemical Association (ICCA) for many years. Evonik defines both in a product stewardship group standard. This includes implementation and control mechanisms to verify compliance. In addition, we have defined the cornerstones of our product stewardship in a product policy. In addition, in the 2023 reporting year, Evonik began working on a policy paper on product stewardship. 

Responsible use of chemicals We look at our products along the value chain, from raw material procurement to delivery to our industrial customers. This approach encompasses the topic of product stewardship and is not to be understood as a complete life-cycle assessment. In view of the global trade in chemical products and chemicals, it is important to promote broad communication on their safe handling and use. We face up to this responsibility with a comprehensive, worldwide range of information. This includes information portals, safety data sheets – also for non-hazardous products – in over 35 languages, technical data sheets and extensive information on our website. In addition, we have set up an e-mail mailbox for inquiries. 

Our specialist departments support our customers at all stages of the product life cycle. This ranges from the selection of raw materials to the handling of possible toxicological, ecotoxicological and physico-chemical hazards to the resulting risks, taking into account the exposure. Furthermore, we advise on regulatory requirements for planned uses, including transport and disposal. If necessary, we train our customers in the use of our products. As part of the survey, no violations in the labelling of products were detected in 2023:

IMPLEMENTATION OF THE REACH REGULATION AND DOSSIER QUALITY

REACH requires the registration of all substances that are manufactured, imported into or placed on the market in the EU in quantities of more than 1 tonne per year. Evonik supports the goals for the protection of health and the environment in the handling of chemicals. In order to implement the complex requirements of REACH, we are in close dialogue with our suppliers, customers, trade associations and authorities. 

In addition to the substance registrations that are still required, the focus is on dossier and substance assessments as well as restriction and authorisation. Evonik is currently not affected by its own approvals. In order to determine at an early stage whether our substances may be in focus, we compare officially published substance lists with our portfolio in order to take appropriate measures. To this end, we are in close contact with our customers. Inspections also extend to the raw materials we purchase. For substances of very high concern, such as those that are on the candidate list of the REACH Regulation, we discuss the next steps with the suppliers or look for alternatives if necessary. For all inquiries from our customers and suppliers concerning REACH, we have set up an e-mail mailbox for prompt and comprehensive answers. 

Another focus of our REACH activities is the dossier updates of substances that have already been registered, closely aligned with the Cefic Action Plan, which Evonik has signed as part of a voluntary commitment. The review of the Evonik dossiers with the aim of further improving quality will take place gradually until the end of 2026. We provide annual updates on progress in this report and to Cefic. Since the start of the Action Plan in mid-2019, we have revised more than 420 dossiers. 

GLOBAL PRODUCT STRATEGY (GPS)

The International Council of Chemical Associations (ICCA) initiated the Global Product Strategy (GPS) campaign to contribute to the globally safe and appropriate management of chemicals. Evonik explicitly supports this initiative:

THE GLOBALLY HARMONIZED SYSTEM (GHS) 

The GHS is a global system established by the United Nations for the classification of chemicals and their uniform labeling on packaging and in safety data sheets. The status of GHS implementation continues to vary around the world. That's why we at Evonik have a database in which information about progress, changes, and requirements in the countries is collected and communicated internally. Evonik complies with GHS/CLP requirements worldwide. 

OUR CHEMICALS MANAGEMENT SYSTEMS 

We evaluate all the substances we place on the market (>1 tonne/year). We also take into account particularly hazardous substances in smaller quantities. This enables a well-founded risk assessment. If necessary, certain usage patterns are restricted or, in extreme cases, even bans on the use of individual products are pronounced. 

For the evaluation of our substances, we use the Chemicals Management System (CMS) developed in-house by Evonik. The system allows us to evaluate our fabrics on a global scale. The CMS content has been harmonised with the requirements of the International Chemical Association (ICCA) and the requirements of REACH. As part of CMS, we have already recorded and evaluated all substances that have entered our portfolio as a result of acquisitions in the period from 2017 to 2020. We intend to record and evaluate substances that were added to our portfolio from 2021 to 2023 as a result of acquisitions by the end of 2026. 

As an extension of the CMS, our Chemicals Management SystemsPLUS refers to products that contain more than 0.1 percent substances of very high concern. Our goal is to reduce or replace them wherever possible. The prerequisite for this is an in-depth examination in order to derive suitable measures for a further reduction of possible negative effects on people and the environment. As part of CMSPLUS, we have already recorded and evaluated all products that have been added to our portfolio as a result of acquisitions in the period from 2017 to 2020. We intend to record and evaluate products that were added to our portfolio from 2021 to 2023 as a result of acquisitions by the end of 2026.

GREEN DEAL

With the Green Deal, the European Commission has presented a roadmap on how the EU is to become climate-neutral by 2050. One element of the zero pollution target is the EU Chemicals Strategy for Sustainability (CSS), which will have a far-reaching impact on the chemical industry and its value chain. Evonik supports the goals of the Green Deal and actively advocates at association and commission level to ensure that the planned changes are made with a sense of proportion, that planning is guaranteed, and that REACH remains the central regulatory instrument for chemicals. In addition, we participate in consultations. 

Evonik considers the following tightenings envisaged as part of the REACH revision to be particularly critical: the generic risk approach, polymer registration, the comprehensive data requirements for the identification of substances with endocrine disrupting properties and persistence, and the "Mixture Allocation Factor" (MAF) assessment factor for mixtures.

The generic risk approach is intended to disregard the exposure required for a scientifically sound assessment. It is planned to issue restrictions or bans solely on the basis of certain hazard characteristics, which will be continuously expanded. This approach is not only to be used more intensively in the consumer sector, but also to be extended to the commercial sector. 

The EU Commission is tasked with reviewing and implementing the requirements for polymer registration under REACH. The regulatory process currently being discussed is likely to be multi-stage in the future. Accordingly, a notification phase would initially be planned to cover all polymers on the EU market. In a second step, the polymers would be grouped, including downstream data generation. This would be followed by the registration of the polymers that are actually subject to registration. It is estimated that up to 70 per cent of the polymers on the EU market would be subject to a registration requirement with corresponding data requirements. From an industry point of view, costs and effort must remain within reasonable limits. 

The Chemicals Strategy for Sustainability foresees enhanced data requirements on endocrine disruptors, as well as restrictions and, where appropriate, bans on consumer applications. Endocrine disruptors can be both natural and chemical substances that disrupt or alter the regulation of the endocrine system, resulting in lasting damaging effects. The evaluation factor for mixtures involves the introduction of an additional safety factor for the evaluation of possible additive and synergy effects. The European Commission is calling for a generic factor for all applications. Together with the chemical industry, Evonik is committed to ensuring that MAF is used in a more targeted manner. Currently, the application of a MIF of five for substances >1000 tonnes per year) is being discussed. This could mean that uses that were previously considered safe will have to be re-examined and adapted. The planned amendments to the CLP Ordinance also contain critical points. For example, endocrine disruptors such as PBT/vPvB and PMT/vPvM have been introduced as new hazard classes. PBTs are substances with persistent, bioaccumulative and toxic properties. PMT substances have persistent, mobile and toxic properties. The introduction took place within the scope of the EU (CLP) without prior consultation at UN level (GHS). The aim of the EU Chemicals Strategy is to define substances that meet these criteria as Substances of Very High Concern (SVHC) and to regulate them as such under the CLP Regulation. For Evonik and the chemical industry, it is necessary that the guidelines currently being developed provide comprehensive assistance with classification and labeling.  

The proposed Ecodesign for Sustainable Products Regulation (ESPR) sets performance and information requirements for almost all product categories. These include, but are not limited to, durability, recycling and resource efficiency. From Evonik's point of view, the planned information requirements for the Digital Product Passport go beyond what is necessary, as product information relating to the protection of know-how must be disclosed. In addition, there is a risk that certain Substances of Concern (SoC) will be regulated in parallel with the REACH Regulation. In principle, Evonik welcomes this approach, as it is an important component for safe products in a circular economy. 

In addition, the EU Commission is working on tightening the Industrial Emissions Directive (IED). This calls for the introduction of an environmental management system that includes a so-called chemical management system, including a risk assessment for the environment and health, as well as a substitution analysis. The environmental management system is to become an operator obligation and is not congruent with existing environmental management systems such as ISO 14001 or ISO 50001. In addition, limit values will be tightened and performance values such as energy and resource efficiency will have to be complied with. 

Safe and Sustainable by Design (SSbD) is a new concept that aims to assess the safety and sustainability of products as early as the innovation phase. SSbD is in the test phase until the end of 2024 and is being monitored and supported both at the association level and at Evonik in close interdisciplinary exchange between product stewardship, innovation, and sustainability. It is initially planned as a guideline rather than a law and is expected to have an impact on our product portfolio. 

As part of the implementation of the EU taxonomy, Evonik still sees a need for discussion regarding the criteria for Do No Significant Harm (DNSH) with regard to the environmental goal of "pollution prevention and control". Here, the regulatory improvements in the year under review only specified some of the ambiguous wording. In addition, 2023 saw the adoption of the first delegated act of the EU Taxonomy, which lists the criteria for a significant contribution to the environmental objective of 'pollution prevention and control' for selected economic activities. The economic activities for this environmental goal comprise only a small part of our portfolio (1 percent of our sales in 2023). The application of our products for the prevention and reduction of environmental pollution - for example in emission reduction, remediation of contaminated sites or as an alternative to hazardous substances - is largely ignored. 

The EU Commission plans to replace the Packaging and Packaging Waste Directive with a regulation. Evonik sees the danger that certain substances will be regulated in addition to the REACH regulation. We are following further developments both internally and at association level. 

The EU's Corporate Sustainability Reporting Directive (CSRD) aims to put sustainability reporting on a par with financial reporting. These include uniform EU standards for sustainability information, the so-called European Sustainability Reporting Standards (ESRS). In the future, Evonik will have to prepare corresponding sustainability reports on the basis of the CSRD and thus disclose information on the ESRS. The requirements related to product stewardship are contained in the ESRS E2 standard "Pollution". 

As part of our sustainability analysis of the businesses, aspects of product stewardship along the value chain are also examined. In the year under review, we recorded and evaluated product stewardship signals in various categories of our business sustainability analysis. Signal categories 1 and 2 refer specifically to critical substances and regulations. In signal category 3, sustainability ambitions of the value chain are also recorded for the topic of product stewardship and chemical safety before they become part of the regulatory framework. PARCs with negative valuations – so-called "transitioners" or "challenged" sales – make up only a small part of our portfolio. We want to keep the share of sales with "challenged" products below five percent in the long term (chapter "Strategy and Growth", p.22). This is done both by continuously replacing dangerous products and by working on alternative solutions.

REACH-LIKE REGULATIONS IN THE REGIONS 

Various countries and regions have either already introduced or are in the process of implementing chemical regulations that are broadly in line with EU REACH requirements. This applies, for example, to South Korea, Turkey, Taiwan and the Eurasian Union. Other countries – such as the US – have also raised their standards significantly. Evonik actively monitors the global development of regulations and ensures their implementation in the respective regions. In South Korea, coordination is underway within the Substance Information Exchange Forums (CICO) and consortia for the next volume band. In Turkey, substances are continuously registered. In addition, Evonik is monitoring the development of further emerging regulations in order to prepare accordingly. This includes, for example, the entry into force of the new Chemicals Regulation in the Eurasian Union. According to the current status, the regulation is to come into force in Russia on September 1, 2024, and in the other countries of the Eurasian Union two years later. A REACH-like chemicals regulation is being planned for India. In order to be able to accompany further developments, Evonik has advocated for the Indian Chemical Council (ICC) to establish a new working group "Product Stewardship Advocacy Committee". Evonik has taken over the leadership of this working group. 

In view of the increasing scarcity of raw materials and strained supply chains, better use of resources and circular management are becoming increasingly important to Evonik. 

Circular economy is a system-oriented approach that encompasses industrial processes and economic activities along the entire value chain. The approach aims at a climate-neutral and resource-efficient economy in which the value of products, materials and resources is preserved for as long as possible. In concrete terms, this means decoupling economic growth from the use of resources by returning valuable raw materials to the cycle after the use phase. Better use of resources and circular management are becoming increasingly important for Evonik in view of planetary boundaries and the diversification of raw materials. As a specialty chemicals company, Evonik is an integral part of various value chains and has in-depth knowledge and expertise about the processes, technologies, opportunities, and risks of upstream and downstream players. With our activities, we counteract the insufficient availability of resources in the supply chain and in our production and make them less dependent on finite fossil and other non-circular resources. In addition, the circular economy opens up new business opportunities and attractive growth opportunities for Evonik. 

Circular economy considers the entire life cycle of products. The focus is on the manufacturing phase, the use phase and the recyclability of products. In the manufacturing phase, recycled, bio-based or CO₂-based sources are used as a substitute for fossil raw materials. Products in the use phase are characterized by durability, repairability and reuse. In order to close the material cycles, products must be recyclable or biodegradable at the end of their life cycle. As a result, less material is sent to landfill and incineration. Evonik sees the circular economy as a fundamental transformation of the way we do business. We support all business activities, technologies and innovations that contribute to the acceleration of environmentally and economically sensible measures towards circular value chains. The circular economy is one of Evonik's top 3 key topics. In 2023, we continued to advance our activities in this area. In 2024, we develop a policy paper on the circular economy which was published on the Evonik website. In doing so, we are reaffirming the importance and significance of circularity for Evonik's business activities. 

GLOBAL CIRCULAR ECONOMY PROGRAM

In 2023, we expanded the former Global Circular Plastics Program into the Global Circular Economy Program. In this way, we are strengthening the further development of our business activities in the direction of a circular economy, including all of Evonik's business areas. Thus, in addition to the previous focus on plastics cycles, circular raw materials of all kinds as well as value chains in all Evonik markets are now also being considered. With this in mind, we have transformed our previous goals into a new one. 

Goal: 

• More than €1 billion in additional revenue per year from circular products and technologies by 2030 

The Global Circular Economy Program comprises short- to medium-term activities with a clear focus on business developments. Examples of our activities are: 

• the use of circular raw materials, 

• the development of solutions for mechanical and chemical recycling technologies, 

• the identification of business opportunities and the development of circular business models, and 

• the intensive examination of and the design of new value chains. 

As a specialty chemicals company, Evonik is at the heart of various value chains. The further development of our technologies and products and the change of our raw material platforms is therefore a basic prerequisite for enabling the circular economy. In addition to our own ambitions, the main drivers are the voluntary commitments of our customers and other companies along the value chain, which are formulating increasingly ambitious CO₂ reduction targets and targets for the use of circular materials.  

For Evonik, cooperation with partners along the entire value chain is an important key to contributing to the success of the transformation towards a circular economy. Evonik differentiates its circular economy activities into upstream (upstream), own (gate-to-gate) and downstream (downstream) activities. 

Upstream 

The procurement of circular raw materials includes bio-based, recycled (bio-based and non-bio-based) and CO₂-based materials. Evonik's goal is to increase the use of circular raw materials in order to reduce the consumption of finite resources, reduce its own footprint, and, in particular, reduce Scope 3 emissions along the value chain. To this end, we examine technical, economic, ecological and social aspects and develop new business models. In the year under review, for example, Evonik introduced the ECOHANCE® product range. As part of this program, main care products are produced based on post-industrial plant residue streams. For example, the raw material source for the product ECOHANCE® Care PSC3 is a fatty acid-enriched olive oil that cannot be used for food production. This process therefore does not compete with the cultivation of food and contributes to the conservation of primary plant resources. In addition, the expansion of transparent supply chains is supported, also with the involvement of smaller suppliers.  

In the year under review, Evonik entered into a partnership with REMONDIS, one of the world's leading e-recycling companies, to establish a cycle for sustainable polyurethane recycling. As part of this cooperation, REMONDIS supplies us with used mattress foams as a circular raw material. The limited availability of circular raw materials remains a challenge due to regionally fluctuating supply, infrastructures currently under construction and legal frameworks. 

Gate to Gate 

have always been of great importance in Evonik's production. We are driving our activities towards a circular economy with a wide range of measures. These include:  

• Measuring and reporting on the amount of waste generated in our operations in line with our goal of reducing production waste 

• Increasing resource efficiency through continuous optimisation of production processes to avoid and minimise waste 

• Harnessing the benefits of integrated production facilities and systems for systematic waste management in line with the waste hierarchy 

• as well as the reduction, reuse and recycling of the packaging used for our products 

In accordance with the legal waste hierarchy applicable in the EU, waste from the company's own production is avoided primarily through continuous process optimisation of operational processes and the use of the advantages of integrated production sites and integrated systems. In addition, waste must be recycled or used to generate energy. It is only as a third option that these are safely eliminated. In the period from 2021 to 2030, Evonik aims to reduce the specific amount of production waste in relation to the production volume by 10 percent.  

Our goal is to further close material cycles and design packaging in a more sustainable way. In this way, we also want to make a contribution to reducing our CO₂ footprint in the future. Evonik is already using plastic packaging and bulk packaging materials with recycled content at various Evonik sites. The supply of more sustainable packaging alternatives has improved significantly, not least due to the tightening of national and European packaging regulations, the introduction of the plastic tax in various EU countries and increased demand from customers. The packaging type, appearance and handling (filling, palletizing and transport) of sustainable packaging alternatives are retained. 

We are striving to steadily increase the recycled content of packaging. In the case of the categories with a low recycling rate, there are regulatory or technical barriers to an increase. We address this in exchange with representatives of packaging technology within the German Chemical Industry Association (VCI) as well as with customers. We can report the following recycling rates per category.  

In the area of rigid large containers, we work with different approaches depending on the product, process and customer to increase the recycling rate. These include the reuse of washed IBCs (Intermediate Bulk Containers; Recycling rate: 100 percent) as well as rebottelized IBCs with new plastic inner bladder, reused steel cage and pallet (recycling rate: 70 percent to 80 percent). In other areas, we use IBCs with a plastic inner bladder made of around 40 percent recycled material, called PCR (post-consumer recyclate), which results in a recycling rate of 60 percent to 65 percent. Since 2022, the first pilot sites in Germany have already been using PCR IBCs for non-hazardous goods in filling. In the year under review, we expanded this activity to other locations and containers. The plan is to roll this out locally, nationally and globally in the future. Since October 2023, we have also been using PCR IBCs and 220-litre plastic drums in the field of dangerous goods. The plan is to roll this out locally, nationally and globally. In addition, with the increased use of reusable load securing systems such as the DrumGuard system, we are reducing the consumption of wrap-around stretch films and thus reducing plastic waste for our customers.

Downstream 

Over the course of product use and at the end of the product's lifetime, Evonik offers solutions that support the circular economy of customers and consumers. In this way, our additives increase the shelf life of our customers' products and thus contribute to resource conservation. In addition, the additives improve mechanical and chemical recycling processes as well as recyclates. In the field of mechanical recycling, Evonik provides a comprehensive portfolio of additives with which we support our partners in optimizing the efficiency and quality of their circular processes and products. A long service life and good usability of products ensure that the use of primary resources and waste is reduced. For example, our additives for building protection protect the stability and aesthetics of concrete structures from weather and environmental influences.  

Among other things, our surfactants can be used to wash off printing inks from used plastics more quickly and to reduce ink residues in recycled plastics. In addition, less water remains on the plastic after washing, so that time and energy can be saved in the drying process. Our additives also minimize odor and improve the processing and mechanical product properties of recyclates. As a result, higher quantities of secondary materials with improved recyclate qualities can be achieved. In addition, we are working in a consortium with BMW and other companies along the value chain to achieve the goal of enabling a high proportion of recyclates for car components and thus circularity in the automotive sector. 

In 2023, Evonik continued its collaboration with Wildplastic, a start-up that promotes the collection of plastic waste from nature through fair payment in countries with inadequate waste management systems. Recycled plastics are reused, for example, as high-quality garbage bags or shipping bags. In addition to providing additives for the washing and processing process, we offer Wildplastic an extensive network and at the same time support the creation of jobs in the countries concerned.  

With our technologies and products, we make it possible to recycle end-of-life tires into high-quality applications and thus avoid incineration. Our partners replace fossil bitumen in road asphalt with tyre granules and thus contribute to a reduction in the ecological footprint. In addition to lower traffic noise (whisper asphalt) and lower fuel consumption of the cars, the road surface is significantly more durable, recyclable and requires less maintenance. 

Chemical recycling offers a solution to waste streams that cannot be mechanically eco-efficiently or technically recycled. This applies, for example, to mixed, heavily soiled or colored thermoplastics or thermosets that cannot be melted. To this end, Evonik provides its partners with additives, absorbents, catalysts, and process know-how. In this way, we enable the chemical recycling of plastic residues that would otherwise be incinerated or landfilled. 

In this way, we contribute to the production of pyrolysis oils in the case of highly mixed or polluted plastic streams. In this process, plastic streams are converted into a pyrolysis oil at high temperature in the absence of air, which can be used as a substitute for fossil naphtha in the cracker in order to provide basic building blocks for polymer synthesis. The technology is currently still on a pilot scale. In order to contribute to meeting the ecological and economic requirements on a large scale, we have expanded our range of products for the production of pyrolysis oils. Evonik supplies absorbents and catalysts for the separation of contamination and purification, as well as additives that enable the pyrolysis oils to be processed at low temperatures. With our SiYPro™ additives, we help our partners to make further processing in the cracker more robust and safer. Another way to keep very contaminated or mixed plastic streams in circulation is the production of synthesis gas, for which we also provide purification technologies such as absorbents. 

Even in the case of PET packaging and colored PET plastics that are unsuitable for mechanical recycling, our alcoholate catalysts and process technologies ensure that they can be recycled at the end of their life cycle. We assume that in the future, alkoxides will play an important role in the chemical recycling of PET plastics. Here, Evonik is expanding its global business with alcoholates with a new plant in Singapore. In addition, other classes of materials will also be important in the future. For example, Evonik has developed processes for chemical recycling that can be used, for example, to recover the basic building blocks from polyurethanes and use them for the production of new polyurethanes. Evonik provides know-how in catalysts and process technology, while the partnership with REMONDIS secures the supply of circular raw materials and contributes expertise in post-use recycling logistics. 

Since the circular economy goes beyond recycling approaches and also includes the production and use phase of products, Evonik technologies are also used in design for recycling and design for circularity. For example, the heat-sealing binder (DEGALAN)® makes it possible for packaging materials such as yoghurt pots to be made from just one material and thus recycled. Other examples include a 3D-printed mono-material concept car seat or the mono-material toothbrush: polyamide 12 replaces previous material mixtures, making cost-efficient and ecological mechanical recycling easily possible. The concept is intended to inspire other product designers to reduce the variety of materials as much as possible. New business models, such as leasing models, can also enable such concepts in more price-sensitive markets. At Evonik, we are complementing the technical approach with the use of bio-based products, which are particularly important for our Nutrition & Care division. An important technology platform here is our biosurfactants, which represent an increasingly relevant raw material basis for various product ranges. For products and ingredients that are difficult or impossible to collect and recycle due to their nature or application, an alternative solution for circularity is needed. Evonik offers this, for example, with biosurfactants that are based entirely on renewable raw materials. For example, our rhamnolipids are used in cosmetics or household cleaners. The organic sugar-based products are mild, highly efficient and also completely biodegradable. This means that they become part of the biological cycle again at the end of the use phase. 

CIRCULAR ECONOMY: ENGAGEMENTS 2023 

Evonik is a member of the European Circular Plastics Alliance. This EU initiative aims to introduce 10 million tonnes of plastic recyclate into the European market annually from 2025. In addition, we have expanded our involvement with Plastics Europe in Germany and Europe as well as the European chemical association Cefic, all of which promote circularity. We are also a member of Circular Economy for Flexible Packaging, an initiative that promotes circular solutions for flexible packaging along the value chain. We also support the "Circular Valley" initiative of WupperTalBeWegung e.V., which connects start-ups in the field of circular solutions with industry. In addition, it offers representatives of industry, science, politics and culture a platform for constructive dialogue in order to promote the transformation towards a circular economy. 

The circular economy thrives on networks and partnerships. Frameworks for a common understanding of the activities are therefore essential. As a member of the WBCSD, we continue to be involved in working groups that deal with the standardization and evaluation of circularity both in the chemical industry and along the value chain.  

Evonik is participating in the Carbon2Chem research project. The aim of this project is to convert exhaust gases from steel mills into chemical products such as ammonia for nitrogen fertilizers or into the precursor methanol. We are a partner of the EU joint project ReProSolar for the complete recycling of photovoltaic modules. In this context, for the first time, all components of old modules will be completely recovered. In this way, pure silicon, silver and glass, among other things, can be returned to the processing industry. 

In the "Circular Economy – Innovation Engine for the Economy" (CEWI) project, Evonik is working with representatives from companies, politics, and other groups on models for End-of-life vehicle recycling in closed cycles.  

Together with companies in the plastics value chain in North Rhine-Westphalia, we are committed to a project that aims to set up a network platform and a pilot factory for practical research into recycling technologies until they are ready for the market. 

Evonik has a significant influence on the environment and society through its procurement volume. By working closely with our suppliers, we want to help prevent breaches of human rights and environmental violations. We strive to counter a lack of transparency and inadequate traceability in the supply chain. By selecting suppliers carefully, we do not simply secure and increase their sustainability standards, we also enhance the quality of the entire value chain.

HIGH SUSTAINABILITY STANDARDS WITHIN THE SUPPLY CHAIN

We focus on the qualification and evaluation of suppliers. In the case of suppliers of individual critical raw materials, we subject these to a separate assessment. By "critical raw materials" we mean all raw materials that may be associated with a potential supply or reputational risk. These include, for example, conflict minerals and renewable raw materials. We have established special procurement strategies for these "critical raw materials".

PURCHASING VOLUME IN 2023

In 2023, we purchased raw materials, merchandise, technical goods and services, as well as energy and other operating resources worth €11.3 billion from our approximately 34,000 suppliers (previous year: €13.6 billion). Of these, around 75 per cent were procured locally (previous year: 76 per cent). Raw materials and merchandise accounted for 47 percent of the total purchasing volume (previous year: 53 percent). Of this, petrochemical raw materials accounted for around €3.4 billion, which corresponds to 65 percent of the raw material base.

SUPPLY CHAIN MANAGEMENT

With our efficient purchasing organisation, we ensure the long-term supply of necessary raw materials and at the same time generate competitive advantages for our operational business.

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TFS-INITIATIVE

Harmonizing global standards in the supply chain creates transparency and makes it easier for both suppliers and customers to reliably assess and evaluate sustainability performance. The chemical industry set up the Together for Sustainability (TfS) initiative for this purpose in 2011. Evonik is one of the six founding members of this initiative. 

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RAW MATERIALS

We source a wide range of different raw materials due to our extensive product portfolio. We have implemented strategic procurement concepts and management systems for raw materials whose availability is essential for our production processes.

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MASS BALANCE APPROACH    

Mass balance involves mixing virgin fossil and renewable or circular raw materials into existing systems and production processes. The renewable amount is then allocated mathematically to specific products and is certified by a neutral third party to verify the use of renewable or circular resources across all stages of production.

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TRANSPORTATION SAFETY & LOGISTICS

Safe transportation of goods is very important for us. We use a uniform process to select logistics service providers for transportation. We also regularly review their performance. 

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Many of our products are based on the use of advanced processes and technologies, which we are continuously improving. At many of our sites, we have backwardly integrated production complexes where we produce key precursors in adjacent production facilities. The benefit for our customers is the high reliability of supply.

Efficient production facilities and a well-stocked innovation pipeline are crucial elements in Evonik’s business model. Continuous optimizations in both areas are therefore a matter of course to us. In many cases, we develop and use proprietary production processes that have a technological edge.

Our largest production sites – Marl, Wesseling and Rheinfelden (Germany), Antwerp (Belgium), Mobile (Alabama, USA), Shanghai (China) and Singapore – have integrated technology platforms used by various units. This results in valuable economies of scale and maximizes the use of material flows because by-products from one production line can be used as starting products for others.

Continuous process optimization has always been very important for Evonik. The expertise is provided, first and foremost, by our Process Technology unit and the Simplification, Excellence, Empowerment and Cooperation (SEEC) team. SEEC brings together process and technology experts from various organizational units with a wide range of knowledge. It is supported by our employee suggestion program.

Evonik believes that key technologies like biotechnology and nanotechnology are essential to find solutions for pressing future challenges.

These technologies can play a major role in increasing the use of renewable raw materials and in improving the efficient use of resources. Social acceptance is vital for the long-term viability of products based on these technologies. Evonik is committed to responsible use of biotechnology and nanotechnology in dialog with society. It only markets or uses such products and methods if safety and environmental compatibility comply with the state of the art and the latest scientific findings. Evonik places strict limits on research and use of new technologies. These are derived from ethical values and, in particular, respect for human life and dignity. 
Evonik has therefore issued company guidelines on the responsible handling of nanotechnology and biotechnology.

NANOTECHNOLOGY

For Evonik, nanotechnology represents a key technology with considerable economic relevance, both because it is generally important in a variety of production processes and products, and because it can potentially be used in such a broad array of chemical applications.

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BIOTECHNOLOGY

Responsible use of biotechnology to improve life, today and tomorrow.

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Evonik bears a high level of responsibility for the safety and quality of its products throughout their entire life cycle and for protecting people and the environment. To evaluate the safety of our products, we need toxicological and ecotoxicological data.  Until now, animal studies have often been the only way to obtain reliable data on certain issues.

In a number of countries, legislation requires animal studies to be carried out to obtain data on chemical substances.

Evonik has such animal studies carried out exclusively by certified testing institutes in accordance with national and international legal requirements. Renowned test institutes are selected and audited for this purpose. In addition, our framework agreements oblige the test institutes to comply with the highest quality and animal protection standards.

COMMISSIONER FOR ANIMAL WELFARE

To meet its high responsibility for animal welfare, Evonik has established an Animal Welfare Officer. The Animal Welfare Officer has scientific training, reviews the relevant key data on animal studies collected in the Group and uses a forum to exchange information with the product stewardship functions on progress in the development and regulatory acceptance of alternative methods. It also coordinates the auditing of testing institutes (e.g., framework contract partners).

AVOID ANIMAL STUDIES

The aim is to reduce the number of laboratory animals as much as possible or to avoid animal studies altogether in the future. To avoid animal studies, Evonik draws on data that has already been published and uses alternative methods and approaches known as "New Approach Methodologies"(NAMs). In addition, joint studies of the same substance are conducted with other manufacturers.

Evonik actively promotes the development of alternative methods to animal studies. For example, the company is a member of the EPAA (European Partnership for Alternative Approaches to Animal Testing) and supports the SET (Stiftung zur Förderung von Ersatz- und Ergänzungsmethoden zurEinschränkung von Tierversuchen / Foundation for the Promotion of Alternative and Complementary Methods to Limit Animal Testing) foundation. Evonik is also involved in ecotoxicological and toxicological issues and methodological developments in the risk assessment of chemicals through its membership of ECETOC (European Centre of Ecotoxicology and Toxicology of Chemicals) and Cefic-LRI (Long Research Initiative).

Evonik acts according to the 3R concept*: Reduce-Refine-Replace.

* Source: Russell, W.M.S. and Burch, R.L., The Principles of Humane Experimental Technique. Methuen, London, 1959. Reprinted by UFAW, 1992: 8 Hamilton Close, South Mimms, Potters Bar, Herts EN6 3QD England. ISBN 0 900767 78 2

We deal intensively with the effects of our own business activities. To this end, we regularly measure and evaluate the direct and indirect effects of our business activities from an economic, environmental and social point of view as a supplement to established analytical approaches.

We hope that this will enable us to identify future opportunities and risks at an early stage, strengthen the resilience of our business model and increase our understanding of the long-term social value contributions of our business activities.

Impact Valuation allows us to draw conclusions about

• the magnitude of the environmental, social and macroeconomic impact of our business activities
• the benefits of Evonik for society as a whole
• significant levers to reduce undesirable impacts and maximize desired impacts along our value chain.

The basis of the impact analysis is an input-output-outcome-impact (IOOI) model, which takes into account the use of resources and the measurable results of a company's activity. The effects derived from this are measured and evaluated along the value chain.

MONETIZATION

Our aim is to monetize individual indicators such as employee training, employment effects or global warming and thus make them comparable. The initial assumptions for this are mostly publicly available. They are based on the findings of well-known economic, environmental and social research institutes.

In many places, our business activities are associated with ecological burdens. We are seeing negative effects in particular in terms of greenhouse gas emissions and water consumption along the supply chain. This is offset by pronounced positive macroeconomic effects along the supply chain and in the company's own production. Evonik offers a range of products that make a positive ecological and social contribution in their applications compared to conventional alternatives.